Shop prices in the UK declined at the fastest rate in July, marking the 15th consecutive month, and the deepest level of deflation since the series began in December 2006, according to British Retail Consortium (BRC) and Nielsen shop price index

Shop prices in July dropped 1.9%, as against the corresponding period a year ago.

During the period, food inflation also fell to 0.3% – the lowest ever recorded, the agency said.

Non-food reported deceleration in deflation of 3.3% in July from 3.4% in June.

British Retail Consortium director general Helen Dickinson said: "Shop price deflation deepened still further in July and marked fifteen consecutive month of falling shop prices for consumers.

"This is great news for households who are benefitting from fierce competition within the industry at a time when disposable incomes remain under pressure.

"Deep and widespread discounting across the grocery sector is intensifying with prices falling almost one per cent month-on-month – another record jump. After accounting for the use of multi-buys and vouchers, food prices are falling," Dickinson added.

Nielsen retailer and business insight head Mike Watkins said: "There is very little food inflation at the moment and this looks set to continue over the summer. Many supermarkets are reducing prices across ambient and seasonal fresh foods, which is helping shoppers make further savings on household bills."